Top 7 tips for buying a house and land package
Buying house and land packages has become increasingly popular with Australian property investors, and with the start of the new financial year just days away there is expected to be a surge of activity from buyers, particularly in outer suburbs of capital cities.
Blogger: Paul Bennion, managing director, DEPPRO
Property investors should consider the following tips before making a decision to purchase a house and land package:
1. Check the demand for rental properties in the local area. If it is a new area in the outer suburbs with limited social infrastructure, then it may not be an attractive location for people to rent a home, and you could struggle to achieve a reasonable rental return. Check with the rental department of a local real estate company to determine the demand for rental properties in the local area and find out what types of homes are in the greatest demand.
2. If you plan to buy a house and land package in a new area, then choose a location with a unique selling point, e.g. a view of a scenic park.
3. The size of the lot is also important when considering the future rental return of a house and land package. If the package has limited garden space and the area is popular with families, then the home may be unappealing to a large number of potential renters, who will want outdoor playing space for their children.
4. Check how many house and land packages in the local area are being sold to investors. It is better to buy a house and land package in an area where most of the residents are owner-occupiers, because they generally keep their properties in a better condition than renters. This can have a bearing on the street appeal of the area, which can be a key issue for future buyers and can impact the resale value of the property.
5. Another issue to consider is the number of new homes being planned in the area. If there are hundreds of new homes planned for the near future, this will increase the overall supply and could limit the potential for capital growth.
6. Take your time selecting a house and land package and read the fine print to protect your interests. Check the price of established homes in the local area that are near new and of a similar size, to make sure you are getting value for money.
7. When you take possession of your new house and land package, undertake a tax depreciation schedule, as new homes offer the maximum tax depreciation benefits. Many investors do not realise that features such as window treatments and floor coverings can be depreciated for tax purposes.
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